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HMRC publishes revised adviser charging guidance

HM Revenue & Customs has published new guidance detailing how adviser charging can be applied for personal and group pension schemes.

Earlier this month, Money Marketing revealed HMRC plans to address a number of issues raised by the industry when draft adviser charging rules were circulated among providers.

In the draft rules, the Revenue created a distinction between an adviser charge relating to lifetime annuity advice and a charge relating relating to wider pensions advice, such as drawdown.

Under this approach, 25 per cent of any adviser charge relating to wider pensions advice would have been deducted from a client’s available tax-free cash.

However, the final rules say: “A registered pension scheme might make a payment to a financial adviser for the cost of pension advice that is given to the member by the financial adviser in relation to the pension scheme.

“Such pension advice might be in connection with the suitability of fund choice, asset allocation, pension provider, pension taxation or checking against statutory limits.

“Also, the advice could cover how to maximise income from the pension fund at retirement or how to maximise the return on an existing pre-retirement pension fund or more general advice on the payment outcomes/risks of respectively choosing the type of pension to be taken; scheme pension, lifetime annuity or drawdown pension.”

In addition, HMRC has clarified how an adviser can levy a consultancy charge on a group personal pension scheme.

The Revenue’s draft guidance had led to confusion about how a consultancy charge would be applied if only a portion of the employees advised decide to join the pension scheme.

The new guidance makes clear that any consultancy charge will be paid by employees who join the scheme.

The new guidance says: “An employer might take financial advice in relation to setting up a personal pension scheme or group personal pension scheme and the cost of that advice is met from the funds of those employees who join the pension scheme.”

The full HMRC adviser charging guidance is available here.


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There are 6 comments at the moment, we would love to hear your opinion too.

  1. I thought we were all in pusuit of greater clarity and simplification?

  2. Well I can safely say that holding level 4 qualifications does not equip me with the skills to understand this stuff. I really have no idea what they are banging on about, and it certainly isn’t workable in any event. Business as usual I guess then.

  3. Why such negativity folks? It is now
    perfectly clear thanks to the efforts of Rob Reid and HMRC.

  4. Couldn’t be simpler – well done Rob!

  5. @Huw 1.41pm. Im with you Huw. Makes no sense to me wotsoever.

  6. What’s not clear about it guys? If you say what your not able to make sense of it would be easier for others to try and explain where you got lost so to speak 🙂

    Investment Advice in East Sussex

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